@tralfamadorianIn hindsight, what do you think you would have done differently with this one before getting into contract or during the due diligence period? Run far, far away, ha! No, really, with how competitive the market is, there was no time to perform proper due diligence before getting under contract.

What I should have done was get my contractor in after it was under contract but before closing and really go through in detail (although we were unable to get access inside - I should have pushed back harder on this). We did review the property from the outside and it looked OK. I did miss a key indicator of the rotted tree in the back, obviously termites, and should have assumed I had termite damage in the house.

Even then, I've dealt with termites before but haven't seen anything this bad. This is very close to a worst case scenario in that regard.

Anyway - if I had picked up on the tree and then correctly assumed a high impact to the property (I wouldn't have), then I could have forfeited my earnest funds and moved on.

@ilsy Good question, I don't know. I used to think the pink 2x4s indicated additional fire resistance but I now understand that to be false or not necessarily the case. It may mean different things for different lumber mills and/or mean nothing at all.

Property #4 Completing bathrooms and trying to find an in-stock rear French door that fits.

Plan is to have this one on the rental market by the end of this month.

Property #5 Appraisal came in well above what I needed, will only have to bring about $10K to close this deal. Appraisal also noted I was short about 250 sq ft short on my initial estimate (county records are also off). This equals about a $27k increase in overall value, a nice bonus to an already great deal.

Property #7 Contractor went through Wednesday and it looks like Iíll be right about $30k all-in, perhaps a little less. Drywall repairs start this week, followed by paint, flooring and the new kitchen.

I'm just about done with my first flip near the Seattle airport. I put way too much money into it. Should have painted the existing cabinets, for example. Would you ever tear out existing undamaged cabinets? Any other thoughts on finding that line between a frugal remodel and too frugal? For example, I think we made the right decision to blow out the kitchen walls to open up the kitchen to the dining and living rooms, but I don't really know.

What's a property wholesaler? Is that an individual or a company? Where do they find deals and what's a normal profit margin for them? If it's so profitable to rehab and sell or rent a house, why don't wholesalers do it themselves?

Congrats on completing your flip. I imagine for a flip, you would want a brand new kitchen. As my properties are rentals, I will try and salvage the cabinets and paint over, install granite and new hardware vs brand new kitchen.

What are the numbers on your flip? Best of luck on the sale side. I'm from WA originally, lot of family on the West side and also on the East side, Spokane area. Texas can't compare.

@Padonak Thanks. A wholesaler is an individual (or a company) that will market for sellers directly, based upon various lists they can pay for or pull manually from city/county records. Lists such as probate, foreclosures, etc.

They'll contact these people directly and attempt to negotiate a quick cash deal. Once they have that deal under contract, they'll add their mark-up and go market that deal to their investors - guys like me. When I close on the property, they make their money and hopefully everyone walks away happy.

Normal profit margin varies. I've seen some make only $3K but more recently I see them make quite a bit more. I think on property #7, the wholesaler made $10k. Pretty impressive for what was probably less than a few hours of work and very little risk on his end.

Going back to the wholesaler of property #7 - he's a good friend of mine so we share details of our business to each other. He buys only in certain areas, not this area, hence he didn't want the deal himself. In addition, he's going after 20+ unit multi-fam and not single family homes, even if they have a $40k+ spread on them.

I should note, there are marketing expenses for the wholesaler, of course. I don't know exactly what his expenses are but I imagine he's spending at least $8k a year on letter mailing/direct marketing. But obviously, 1 deal more than makes up for that and anything more is his profit.

In addition, when he comes across deals in his farming area, he'll cherry pick and perform a full flip on it.

My numbers are embarrassing (I spent too much for the neighborhood), but I'll try to post anyway. Bought for $374k. Put like $90k into rehab, including $13k to a "handyman" that I work with every weekend, plus $20k for a GC and team to install all the cabinets (thought I was going to do that myself) and also to do all the drywall. I do most of the work myself on weekends while keeping my day job.

Held it for 16 months. Transaction and carrying costs combined will come to about $60k. Those numbers are rough, but close. I had a hard money loan to buy at auction with 2% up front and 1% per month for two months. All that said, break even will be about $520k. Gonna put it up in a week or two. Need to do some landscaping still. In fact, still trying to decide whether to attempt that this weekend or pay to have it done.

That's a long hold time and some big numbers for a single family. Must make my $50k purchase price here look like a joke.

I purchased one of my first houses in Ohio for $11k in very early 2014. An amazing 2br/1ba cottage style stucco home with beautiful hardwoods throughout, a small but functional and cute kitchen and two perfect bedrooms. I think I put $5.5k into the rehab and it's rented consistently for $700-750 ever since. That same home, in the right location, would be an easy $600k+ home in Capital Hill or elsewhere.

Everything is relative. Anyway - hope your exit price works out well.

**And no, I don't think I could do what I do in Seattle, Tacoma or Spokane. I looked at Spokane real hard and was making offers in the area...but the rents are just too low for the purchase price. But especially around Perry District on South Hill...just a wonderful area to live in/own in.

My numbers are embarrassing (I spent too much for the neighborhood), but I'll try to post anyway. Bought for $374k. Put like $90k into rehab, including $13k to a "handyman" that I work with every weekend, plus $20k for a GC and team to install all the cabinets (thought I was going to do that myself) and also to do all the drywall. I do most of the work myself on weekends while keeping my day job.

Held it for 16 months. Transaction and carrying costs combined will come to about $60k. Those numbers are rough, but close. I had a hard money loan to buy at auction with 2% up front and 1% per month for two months. All that said, break even will be about $520k. Gonna put it up in a week or two. Need to do some landscaping still. In fact, still trying to decide whether to attempt that this weekend or pay to have it done.

Wow, that sounds like you signed up for an extended course of study at the School of Hard Lessons. I hope you gained some valuable insights and can still manage to eke out a small profit. Ouch.

Property #4 Complete except for rear french doors. The refi is verbally approved, just waiting for the appraisal that should be coming next week (week of 11-Feb). A little bit of drama with the new bank and getting everything together to make them happy. This is my 2nd refi with them and it definitely has me missing the relationship I had with my first bank.

Property #5 I signed closing papers and 2 of the 3 sellers have signed, the 3rd one is a mail away. Rehab on this will not start until late May. Already rented back to the seller.

Property #6 Paint mostly complete, kitchen paint is just about done, just need to start reinstalling the kitchen cabinet doors and then install new hardware. Flooring should start end of this week. I feel a lot better about this property after walking it yesterday with my contractor. The opened up kitchen to the now enclosed former porch, now dining room, looks fantastic. Once we finish with the light cans, flooring, granite throughout including the huge kitchen island, the property will look great. I dropped off the vanities this morning as well as toilets, sinks, mirrors and some other misc bits and pieces.

Went over budget a bit with my electrician. I need to replace him as he continues to go up in price and heís pulled a couple shady moved in the past. That said, at this point, he shows up promptly and gets the job done asap, so Iíll ride it out for these last two properties. Updated photos shown below.

Property #7 Kitchen is in, waiting on granite. Finishing up bathrooms. The paint and floors look fantastic, I think I finally nailed on the perfect grey (Repose Grey Sherwin Williams #7015 if anyone is interested). Itís light enough that it goes well with the dark floors but can also be used with lighter grey floors. I love it.

Professional photos to follow and this will be on the rental market sometime next week.

Property #5 I formally closed on this last week and it's rented back to the sellers until May when I can get in and perform a cosmetic rehab.

Property #6 Flooring has started. Porch enclosure is now complete, increasing the sq ft by ~320. Granite will go in late next week once flooring has wrapped up.

Property #7 Rehab is complete with the exception of some minor exterior repairs that I'm bidding out. I'll update later this week/next with final value numbers and rent rates. Professional photos to follow and this one is now on the rental market.

Property #3 Rented at $1700/mo. Property #4 Appraisal came back today at $236,000 or $107/sq ft -woooooo! My all-in costs were just shy of $142k, so I'm capturing $94k worth of equity on this one, making it the best so far. This is great, considering it's not my favorite rehab - I cut some corners by leaving parts of the existing bathrooms in place, leaving the tile floors (ugly color, don't match the rest of the house), not doing any work to the exterior or replacing the windows. That said, it's a rental and it appraised, so I'm happy.

The final professional photos are below.

Property #5 It's rented back to the sellers until May when I can get in and perform a cosmetic rehab. No change.

Property #6 Flooring is just about finished, baseboard starting today. Granite will go in Thursday. Progress photos are below.

Property #7 Complete (appliances purchased, awaiting delivery). No appraisal as I refinanced this one already at tax value (only pulling about 50% equity out). I did pull recently sold comps and I'm coming up with $91/sq ft. At 1648 sq ft *$91/sq ft = $150,000.

I'm all-in at $112k, capturing $38k in equity. The home is still on the rental market. The final professional photos are below.

Forgive me if you mentioned it already and I missed it, but can you share how you structure your payment to the project manager/boots on the ground point person? Does he get a percentage of the ARV, a payment per project, or payment by day/week? Obviously you're working well together as a team, but just curious how you've structured his portion and if there are any financial incentives for him (or the construction team) to finish on time (or bonuses for finishing early)?

@NonprofitER I used a PM/coordinator for the first two projects and for each project, he earned $1800 split between a 50% kick-off payment ($900) and a 50% completion payment ($900). We had an agreed upon schedule and budget and his job was to manage it to the best of his abilities. There were no further incentives or milestones associated with his scope.

After seeing how well the first two went, I dropped the PM/coordinator and worked directly with the contractor with no local PM/coordinator. Back-up plan would be to reengage the PM/coordinator if things went sideways.

The contractor and I work as follows:

- Roughly on a 33% milestone payout - on a drywall/paint/flooring/exterior job, I'll make 1 payment after drywall & paint is complete, 1 payment after flooring is complete and the final payment after exterior is complete, for example.

- No upfront payment, he works first, then gets paid.

- I supply bulk materials, he will supply consumables and occasionally some bulks that I missed/wasn't able to get. All materials he supplies are reimbursed upon proof of receipt + 10% handling charge for his time.

- Some subcontractors (plumber, roofers, etc) are paid by my prime contractor and I reimburse him. No identified mark-up. There is a risk that my prime contractor marks up their prices, of course, and I do anticipate this happens occasionally. Do I care? Not really. His referenced subs have been good, show-up on time and knock the work out.

- Other subcontractors operate separate of my prime contractor and I pay them directly (HVAC, garage door folks, mold inspections, etc). But at this point, everyone knows each other and communicates without me having to get too involved, generally.